Committee proposes audits of insurance trusts

The legislature’s Joint Health and Labor Committee has approved a proposed bill that would give the Wyoming Insurance Commission authority to conduct financial audits and correct problems if a insurance trust does not have enough money to pay its claims.

The legislation stems from the Wyoming School Board Association Insurance Trust that was found to have a 3-point-4 million dollar deficit earlier this year.

Lawmakers expressed apprehension of giving the Commissioner too much power and looked at regulating when an audit could take place. But Insurance Commissioner Ken Vines says his office needs flexibility.

“Say we got a report from an actuary and we looked at it and we determined that we have questions about his. I still think we still need the ability to do some kind of limited audit if we need to. If we feel there is a real solvency issue there.”

There was discussion over when it is appropriate for the Commissioner to audit trusts, but Rick Shum of Blue Cross Blue Shield told the committee that it was a good idea for the Commissioner to have authority, so that appropriate action can be taken.

“If you have one of these organizations that does get into dire financial trouble, the act of having the financial statement submitted to the commissioner would give him the heads up to say that I ought to audit now. Maybe the remediation to that is raising rates, where the organization may not have in the past.”

The committee decided to narrowly focus the legislation on health insurance trusts and not other health care plans. The bill now heads to the legislature for possible introduction in the 2012 session.